Malaysian PM Najib Razak's gift of millions from Saudi Arabia to be probed

Bangkok: Saudi Arabia says it will investigate a claim by Malaysia's Attorney-General that embattled Prime Minister Najib Razak returned US$620 million ($881 million) to Saudi's royal family from his personal bank account in 2013.

The failure of Saudi authorities to immediately confirm the transfer has deepened mystery about US$700 million that was transferred into Mr Najib's personal bank account.

Attorney-General Mohamed Apandi said the money was an entirely legal "personal donation" from the Saudi family which asked for nothing in return.

But amid a furore over the escalating scandal that has engulfed Mr Najib his critics said it was implausible the money came as a personal donation.

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Malaysian Prime Minister Najib Razak.

Photo: AP

A spokesperson for the Saudi Foreign Ministry said no further comment would be made at the moment about the claim by Mr Apandi, who said on Tuesday he had ordered the country's anti-corruption commission to close an investigation into the money transfers.

Saudi Arabia King Abdullah died a year ago.

Mr Najib on Wednesday ignored a barrage of criticism for failing to explain key questions about the money, saying only in a statement the controversy "has been an unnecessary distraction for the country."

"Now that the matter has been comprehensively put to rest, it is time to unite move on," he said.

Malaysian PM Najib Razak in Kuala Lumpur in January.

Photo: AP

However opposition politicians are demanding to know what happened to US$61 million that, according to Mr Apandi, was not sent back to the Saudi Royal family from Mr Najib's account.

They also want to know who specifically donated the money, why it was donated and why it took more than six months for the government to say where the money came from.

Saudi Arabia's King Salman in Riyadh last year.

Photo: AP

The Wall Street Journal has reported the money flowed to Mr Najib's account through an anonymous British Virgin Islands company and a Swiss private bank account wholly owned by an Abu Dhabi sovereign wealth fund that is intertwined with Malaysia's heavily indebted sovereign fund 1Malaysia Development Berhad, which Mr Najib established in 2009 and still oversees through chairmanship of an advisory committee.

The closest Mr Najib has come to explaining the money came in a statement issued hours after Mr Apandi's announcement.

"I appreciate that political funding is a topic of concern to many people," Mr Najib said, adding that opposition MPs had blocked party funding reform proposals he had initiated in 2010.

"I have instructed them to be put forward again for discussion," he said.

Authorities in the United States and several other countries are continuing to investigate the money transfers and links to the 1Malaysia fund that is struggling to pay US$11 billion in debts and is selling off assets.

Mr Apandi's announcement, which was greeted with widespread scepticism and derision, has intensified pressure on Mr Najib to resign, including from within the ranks of his long-ruling United Malays National Organisation.

Leading opposition MP Rafizi Ramli said the announcement had only made the situation "more ridiculous" and described the prime minister as a "clown".

"This can only happen in fairytales," he said.

National Human Rights Society president Ambiga Sreenevasan said Malaysians were entitled to know the reasons why Mr Apandi has shut down the investigation.

"So far as I can see, the explanation given is not enough because at the end any explanation must make sense and this doesn't make sense," she said.

Veteran newspaper editor and commentator A Kadir Jasin said Mr Najib may be safe from prosecution now "but despite the Attorney-General closing the case, the court of public opinion will continue to try him."

"As for all of us, we have to do some serious soul searching if we care for this country and its future," he said.

As well asserting that Mr Najib had received the money from the Saudi family, Mr Apandi said there was "no evidence" that the prime minister "had any knowledge" of about US$10 million that was transferred into his accounts from a company owned by the Finance Ministry known as SRC, which handles the savings of Malaysian government employees.

Mr Najib was "of the belief" that any of the money he spent had come from the Saudi royal family, Mr Apandi said.

Mr Apandi was appointed Attorney-General by Mr Najib when the incumbent attorney-general abruptly stepped down after the scandal broke last year.

In October Mr Apandi rejected the recommendations of Malaysia's central bank to begin criminal proceedings against 1Malaysia Development Berhad for allegedly breaking foreign-exchange laws, saying there was insufficient evidence.

Lindsay Murdoch is a three-time winner of the Walkley Award, Australia's top award for journalistic excellence. Lindsay is a former correspondent based in Singapore, Jakarta and Darwin. In 1999 he covered the tumultuous events in East Timor, and in 2003 he covered the Iraq war while embedded with US Marines.